A new study supports New Jersey’s new initiative to develop areas around its public transit stations. It found that neighborhoods located within a half-mile of public transit service locations outperformed areas farther from public transit based on a number of factors, such as property sales volume and price and rents.
The report, published by the American Public Transportation Association and the National Association of Realtors®, examined seven metropolitan regions – Boston, MA; Eugene, OR; Hartford, CT; Los Angeles, CA; Minneapolis-St. Paul, MN; Phoenix, AZ; and Seattle, WA — that provide access to heavy rail, light rail, commuter rail and bus rapid transit. It found that residential and commercial property sales near transit stations significantly outperformed areas without public transit access between 2012 and 2016 in all six regions.
“Public transit’s benefits go beyond moving people from point A to point B,” said APTA President and CEO Paul P. Skoutelas. “Public transportation is a valuable investment in our communities, our businesses, and our country. Public transportation gets people to jobs and educational opportunities and helps businesses attract employees and customers.”
Relationship between Real Estate Value and Public Transportation
Theevaluated the seven metropolitan areas for residential and commercial sales performance, rent, neighborhood characteristics, local government interventions and housing affordability. Below are several key findings:
- Between 2012 and 2016, median sales price increases near stations were 4 to 24 percentage points higher for residential properties than in areas farther from public transit. More than 43,500 occupied-units were added near transit in this time period across the seven regions.
- Commercial property values also experienced gains in the studied cities. While data availability limited the office property analysis to five regions, four of them saw median sales price per square foot increase between 5 and 42 percentage points more in transit-proximate areas when compared with areas farther from public transit.
- An increase in residential rents within transit sheds has encouraged developers. Increases in rents were between 2 and 14 percentage points higher in the public transit station area than in neighborhoods located farther away from transit.
- Residents of transit-oriented neighborhoods have greater access to jobs via transit; own fewer cars; and live in dense, walkable areas, resulting in lower transportation costs. In the seven regions, one in four households in transit areas does not own a vehicle. On average, a household spends between $2,500 and $4,400 less per year on transportation.
Key Takeaway for New Jersey Developers
The study confirms that, when choosing where to live, Americans increasingly value proximity to public transportation, along with the ability to conveniently access retail shops, restaurants, and other commercial amenities. At the same time, businesses are recognizing that locating near public transit can greatly assist in attracting quality employees and customers. These trends are all good news for transit-oriented developments.
In New Jersey, the Murphy Administration’s new initiative to spur redevelopment around transit stations is also welcome news. To capitalize on the opportunities, we encourage developers to partner with an experienced attorney who can walk you through the process.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Don Pepe, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
This article is a part of a series covering New Jersey's new initiative to redevelop areas near public transit centers. Additional installments from the series are listed below: